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Software December 12, 2022

New rules to limit the dominance of big tech come into effect

Writen by Nicx

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New European rules on how to limit the power and dominance of the world’s big tech companies are now in effect. The EU Digital Services Act came into force on November 16, and the Digital Markets Act has been in force since the beginning of this month. The new rules aim to increase online competition and put pressure on big tech to be more proactive in fighting misinformation and harmful content.

“Designed as a single, uniform set of rules for the EU, these rules will give users new business protection and legal certainty across the single market. The DSA is the first regulatory tool at a global level and sets an international benchmark for the regulatory approach to online intermediaries,” the EU Commission said in a statement.

DIGITAL SERVICES ACT, brief summary

It aims to create a safer online space for users, stricter rules for platforms
The DSA establishes a “notice and action” mechanism as well as safeguards to remove illegal content.
Online platforms must be transparent about how algorithms work and platforms must be held accountable for the decisions they make.
Measures to combat illegal products, services and content on the Internet, including clearly defined removal procedures
Mandatory risk assessments and greater transparency regarding “recommendation systems” to combat harmful content and disinformation
Online platforms should be prohibited from using deceptive or inducement techniques to influence user behavior through “dark patterns”
Targeted advertising: the text provides more transparent and informed choice for all service recipients, including information on how their data will be monetized and better protection of minors from direct marketing, profiling and behavioral advertising for commercial purposes.

DIGITAL MARKETS ACT, brief summary

The proposed Digital Markets Act (DMA) blacklists certain practices used by large platforms that act as “gatekeepers” and enables the EU Commission to conduct market investigations and sanction non-compliant behaviour.
The purpose of the Digital Markets Act is to ensure a level playing field for all digital companies, regardless of their size. The regulation aims to set clear rules for big platforms – a list of “dos” and “don’ts” – to prevent them from imposing unfair terms on businesses and consumers.
Ending unfair business practices on major online platforms
Limits on “Killer Wins”
Allows users to uninstall pre-installed software applications, such as apps, on the underlying platform service at any stage
Whistleblowers should be able to alert the relevant authorities to actual or potential violations. They should protect them from retaliation
The commission can impose fines of “not less than 4% and not more than 20%” of its total worldwide turnover in the previous financial year.

THE NEXT STEPS

Next steps include national implementation in EU member states. The Commission is also establishing a European Center for Algorithmic Transparency (ECAT) to support its oversight role with internal and external multidisciplinary expertise. The Center will provide support with assessments of whether the operation of algorithmic systems complies with the risk management obligations that DSA establishes to ensure a safe, predictable and reliable online environment.

After the entry into force of the DSA, online platforms will have 3 months to report the number of active end users (February 17, 2023) on their websites. After that, the big platforms will have 4 months to comply with the DSA obligations.

The EU Digital Markets Act has been in force since November and in six months, until May 2, should be implemented in all EU countries.

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